financial instruments 3 sections
Part 1
You need to present to your client, Alice Cartwright, the pros and cons of 3 different investments that are available to the average investor. The 3 types of investments that you chose for her first investment are as follows:
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- Bonds
- Common stock
- Mutual funds
In a PowerPoint presentation of 8 to 10 slides, provide your client with an overview of each of these types of investments. The presentation should be concise so that it does not overwhelm her.
part 2
You need to present to your client, Alice Cartwright, some investment options for her to choose from. Her choices are between the following 2 bonds:
|
Bond |
Description |
Face Value |
Coupon Rate |
Years to Maturity |
|
Bond A |
corporate bond in ABA company |
$1,000 |
10% coupon |
12 years, paying annual payments |
|
Bond B |
corporate bond in ABA company |
$1,000 |
10% coupon |
2 years, paying annual payments |
For each bond, answer the following questions:
- What is the valuation of the bond if the market interest rates are 12%?
- What is the valuation of the bond if the market interest rates are 6%?
- What is the valuation of the bond if the market interest rates are 2%?
- What is the value of the bond at the present time?
- What will the bond be worth at maturity?
- Are there differences in bond prices? If so, explain why.
You decide to show Alice Cartwright how beta affects the volatility of stocks. You need to go out and find 5 stocks in which you think Alice might have investment interest.
Complete the following for this assignment:
- Identify the stocks in which you would have Alice invest.
- Make sure each stock has a different beta.
- Either track the stocks for 4 days, or use historical data to monitor price fluctuations in the market price.
- Comment on the price changes relative to the beta.
- Discuss other items that could affect the stock price.
